Australia’s Assistant Treasurer, Nick Sherry, has announced that Australia and Chile have signed a comprehensive bilateral double taxation agreement (DTA) – the second such agreement between Australia and a South American country.
The signing of the DTA had been delayed due to the earthquake in Chile on February 27, and the Australian government thanked the Chilean government and its officials for being able to bring the agreement to a conclusion in difficult circumstances.
"The new income tax treaty between Australia and Chile will provide certainty and stability of tax treatment for Australian and Chilean cross-border investors and reduce tax-related barriers so the economic relationship between our countries can continue to grow," Sherry said.
"Chile is a major destination for Australian investment, especially in the mining sector. The signing of this historic tax treaty is a great step forward for Australian businesses,” he continued. “It will help maintain the integrity of Australia's tax base by allowing the exchange of taxpayer information, including bank information, between Australian and Chilean tax administrators."
The provisions of the new DTA with Chile will also include reductions in source-country withholding taxes on certain cross-border payments of dividends, interest and royalties; and rules to determine when an enterprise or an individual of one country may be taxed on its activities abroad. There will be an agreed basis for determining the allocation of profits within a multinational company to reflect the transfer pricing that would be adopted by independent parties.
There will be a general obligation for both countries to relieve double taxation on cross-border income by permitting tax paid under the other country's laws, and in accordance with the DTA, to be allowed as a credit against tax payable under their own laws. Special rules will preserve the application of existing tax arrangements between Chile and Australian companies under the provisions of Chilean legislation. This is of particular importance to Australian mining companies with investments in Chile.
Legislation to give the new treaty the force of law will be introduced into the Australian and Chilean parliaments as soon as is practicable, Sherry informed.A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.asp
Hong Kong announced on January 15, 2018, that it had entered into a competent authority agreement with France for the exchange of country-by-country reports.
Japan signed a DTA with Iceland on January 15, 2018.
According to preliminary media reports, on January 12, 2018, the Czech Republic and South Korea signed a DTA to replace their existing pact.
According to a January 12, 2018, update from the Irish Revenue, the country's DTA with Kazakhstan became effective on January 1, 2018, having entered into force on December 29, 2017.
Japan and Argentina launched DTA negotiations on January 10, 2018.
The United Arab Emirates Cabinet on January 7, 2018, approved two double tax agreements concluded with Moldova and Croatia.
Taiwanese Premier Lai Ching-Te has directed the Ministry of Finance to work towards a Taiwan-US tax treaty.
Cyprus and Saudi Arabia signed a DTA on January 3, 2018.
According to preliminary media reports, Colombia and Japan are negotiating a DTA.
Georgia and Moldova signed a DTA on November 29, 2017.
Luxembourg and Kosovo signed a DTA on December 8, 2017.
Switzerland and the United Kingdom signed a DTA Protocol on November 30, 2017.
According to an update from the Liechtenstein Government, the new DTA with the United Arab Emirates will become effective from January 1, 2018.
According to preliminary media reports, the Netherlands and Liechtenstein held a first round of DTA negotiations over three days ending November 17, 2017.
Saudi Arabia's Cabinet on November 28, 2017, authorized the signing of a DTA with Bulgaria.
Bahrain's Cabinet has approved the signing of a new DTA with Hong Kong, the state news agency said November 13, 2017.
Hong Kong announced on November 24, 2017, that its DTAs with Pakistan and Latvia had entered into force.
Finland on November 2, 2017, confirmed that a new DTA signed with Germany will be effective from January 1, 2018.
The DTA between Cyprus and Iran will become effective from January 1, 2018.
India ratified a third Protocol to its DTA with New Zealand on November 2, 2017, publishing a Notice in its Official Gazette.
Gibraltar and the United Kingdom are considering launching negotiations towards a DTA, according to recent comments from the UK's Economic Secretary to the Treasury.
Barbados and Italy have exchanged instruments of ratification in respect of a DTA, which will now become effective from January 1, 2018.
Switzerland's Government on October 25, 2017, adopted a dispatch on the DTA concluded with Pakistan, enabling its ratification.
Spain and Portugal signed a DTA on October 18, 2017.
Pakistan and Latvia initialed a DTA on October 25, 2017.